A dried-up lake with an odour like rotten eggs at times is proving frustrating in northern South Australia, with environmental authorities and a council at odds about the cost of fixing the problem.

Bird Lake has the magnificent backdrop of the Flinders Ranges in the distance, but for Port Augusta's residents the stench remains a problem after a local power station closed in 2016 and the discharge of water stopped.

The Environment Protection Authority (EPA) said Port Augusta Council needed to manage the issue.

EPA acting chief executive Peter Dolan said the agency had worked with the council on a potential remedy.

"The council owns the lake, the EPA as the environmental regulator would expect the council to manage the odour from their lake," he said.

"They have done some work last year, and we assisted the council with developing some specifications.

"They actually got a contractor in to design a solution — to come up with ideas about how the odour could be managed."

Council says remediation costly

Port Augusta Mayor Sam Johnson said it was beyond the scope of ratepayers to deal with such large remediation projects.

"This is why we have departments like the Department of Environment, or the Environment Protection [Authority]," he said.

"Local government is roads, rates and rubbish — not go forth and conquer on one of the greatest unknown environmental remediation projects we've ever seen."

The Mayor said the EPA seemed to be taking a view at odds with what it had previously indicated to the council.

"It actually contradicts something that the EPA gave advice [about] to council only about a week, a week-and-a-half ago … that they were looking to take more serious action in respect to Bird Lake and some of the issues … particularly the odour arising in the summer months," he said.

Mr Johnson said Bird Lake was a poor welcome for people who drove into the regional city.

The council concedes there has been a smell for decades when there is little or no water flow, but a consultant's report concluded there was no health or environmental risk from the smell.

The South Australian Government has previously indicated it hopes to get some federal support to achieve a permanent solution.

Mr Dolan said he was not convinced the strong odour from Bird Lake was really a massive problem for Port Augusta residents, but a sports club with its rooms across the road said it got many complaints about the smell, including that it got into the air-conditioning system and reached the football club's function room.